Like a nimble professional driver navigating a multi-car crash on the racetrack, some brands are making slick moves through the troubled economy. And as they slip past the wreckage, they are hitting the branding accelerator hard to put distance between themselves and their rivals.
Ford has a better idea: On second thought, just keep the bailout money
In June, Ford outsold Toyota for the third month in a row, which is huge news for a brand that just eight months ago stood hat-in-hand in front of Congress asking for a $9 billion line of credit. Ford smartly reversed its position on the need for bailout funds and its brand has benefited. Various awareness and preference studies have shown Ford to be building a lead on their bailed-out competitors, and their sales, though still lagging last year’s, are down far less than GM or Chrysler in 2009. Ford has shown itself to be less dependent on rebates and other incentives than the other two thirds of the Big Three, though they have cloned the Hyundai job-loss loan guarantee.
In short, Ford is actually selling cars, not just low monthly payments, cash back, and extended warranties. Their management appears to see a clear opportunity to become the top American car brand. So they stepped back from the stigma of the public cash trough and have kept their brand concept about their cars and trucks, not their cash deficits and dealer closures.
Big Mac attacks
McDonalds, with value and family at the heart of its brand, is well suited to ride out a recession. But while some rivals have seen declining sales, McD’s has increased same store sales, in particular through the growth of their McCafe line of coffee-based drinks. In doing so, they have taken coffee share away from the faded star in the field, Starbucks, whose premium position is being sorely tested by the current economy. Globally, the Golden Arches is growing even faster than at home; 6.35% abroad and 2.8% domestically according to the latest figures available at bloggingstocks.com. With about 1% growth, Wendy’s and Burger King continue to shrink in the rearview mirror.
Goldman sacks their competition
Buried in the clutter of financial news reporting in early July were the stunning second quarter results of Goldman Sachs, which has emerged from the rubble of Wall Street investment banking firms with soaring profits, a stress-tested balance sheet, and a rejuvenated brand. While the investment banking industry is still licking its wounds and avoiding public backlash over executive compensation packages, Goldman is laying the groundwork to control an even greater share of investment banking in the future. A strong company before the collapse of their industry, they will have a pillar of credibility for many years to come for speeding through this down period in stellar fashion.
For leading brands, it’s good to be king
Leading brands typically have more tools at their disposal to stay on top. They are usually more profitable than their trailing rivals. They have more purchasing clout to keep costs down (e.g.: Wal-mart). They often have broader distribution than their competitors. And they nearly always have more brand equity.
But two key traits of leading brands that stay on top through thick and thin are they continue to invest in their brand and to innovate with their products or services. The McDonald’s Southern Chicken Biscuit sandwich has helped build their breakfast business, along with the McCafe success mentioned earlier. Ford has introduced smaller cars that actually sell such as the Fusion and Focus, which is helping them pull away from GM and Chrysler. Apple continues to introduce new iPods and iPhones that have countered a slowdown in computer sales being felt across the industry.
In addition, leaders like McDonalds have not cut their ad budgets and have actually been able to purchase more media weight with the same dollars. At a time when the easy decision would have been to cut their ad spending, without reducing levels from the previous year, McDonalds has committed to building sales and market share instead. And it’s working.
So what if you’re not a leading brand and don’t have the massive assets of an industry giant? There is still opportunity to take advantage of a changing marketplace, where new impressions of your company and its brand can have lasting benefits beyond the current economic malaise. Choose a segment of your business where you are strong, and make a push there. Ford and McDonalds are seizing the day, but even in microcosm they have pushed specific new products to help them make their move. The right move at this critical stage of the race will likely keep them in front for years to come.